Guillet Inc. produces and sells a single product. The selling price of the product is $180.00 per unit and its variable cost is $46.80 per unit. The fixed expense is $618,048 per month.
-The break-even in monthly dollar sales is closest to:

Question

Quizplus · Accepted Answer

Unit CM = Selling price per unit - Variable expenses per unit
= $180.00 per unit - $46.80 per unit = $133.20 per unit
CM ratio = Unit contribution margin F1F1F1S1F1F1F10 Unit selling price = $133.20 per unit F1F1F1S1F1F1F10 $180.00 per unit = 0.74
Dollar sales to break even = Fixed expenses F1F1F1S1F1F1F10 CM ratio
= $618,048 F1F1F1S1F1F1F10 0.74 = $835,200